07262001.doc

DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
RON LAW
LOU ANN WESTERFIELD
BILL EASTLAKE
LYNN ANDERSON
RANDY LOBB
DAVE SCHUNKE
TONYA CLARK
BEV BARKER
GENE FADNESS
WORKING FILE
FROM:
DATE:
JULY 26, 2001 RE: IDAHO POWER’S EMERGENCY CURTAILMENT PLAN (TARIFF RULE J), CASE NO. IPC-E-01-20

On June 5, 2001, Idaho Power filed its electric load management plan (the “Curtailment Plan”) for the curtailment and interruption of electric service. The Curtailment Plan is denoted in the Company’s Tariffs as Rule J. The Curtailment Plan outlines the procedures employed by the Company to curtail (i.e., temporarily interrupt) electric service to its customers during emergencies and power shortages. The Curtailment Plan is intended to provide equitable procedures for the curtailment of power while minimizing adverse impacts to customers and maintaining overall system reliability.
Although the Company’s operations are designed to provide a constant and reliable source of electrical supply, situations may arise in which Idaho Power must curtail service to its customers. For purposes of Rule J, these situations include unforeseen outages and fluctuations caused by: 1) weather, animals, and equipment failure to the Company’s generation, transmission and/or distribution systems; 2) an inability to procure sufficient quantities of energy from its own generation or from the wholesale market; and 3) constraints in the transmission system that inhibit Idaho Power from importing or distributing energy into or within its system.
BACKGROUND
Idaho Power serves customers in Idaho and eastern Oregon. Its generation, transmission and distribution facilities (commonly referred to as components of its system) serve customers in Idaho and Oregon. In addition, the Company’s coal-fired thermal generating resources are located in Wyoming, Nevada, and Oregon. Idaho Power’s system is interconnected with other utility systems in the western United States in a regional system that it commonly referred to as the “western grid.” The western grid extends from two Canadian Provinces, includes 11 western states and portions of Mexico. The Western Systems Coordinating Council (WSCC) establishes operating and liability criteria to maintain the integrity of the western grid.
Curtailment of the Company’s services may occur in one of two general circumstances. First, curtailment may be caused by unforeseen events with little or no warning. For example, lightning strike or equipment failures may cause protection equipment within the Company’s electric system to automatically “trip” to protect the system from damage (or further damage) and to maintain reliability of the unaffected portion of the system. Second, curtailment could result from circumstances that gradually develop over time or occur in a foreseeable manner. An example of the second type of curtailment may result from extended cold weather or extremely low hydro conditions.
The Company’s Rule J Curtailment Plan is also related to Idaho Power’s participation in the “Regional Load Curtailment Plan” (RLCP) and the “Northwest Energy Emergency Plan” (NEEP). The RLCP addresses shortage of regional electric supply, i.e., when the Northwest suffered a prolonged energy shortage due to drought or other fuel shortage conditions. Under this RLCP, the states of Idaho, Montana, Oregon and Washington implement voluntary and mandatory load curtailments. The intent of the RLCP is to have customers reduce load so that rotational power outages (rolling blackouts) can be avoided.
The NEEP contains procedures for: 1) identifying potential northwest energy shortages; 2) issuing appropriate public alerts; 3) coordinating communication efforts; and 4) taking actions to reduce shortages. The NEEP was developed by the Pacific Northwest Utilities Coordinating Council to increase the region’s ability to avoid power emergencies or longer-term adequacy problems by promoting regional coordination, cooperation and communications. The NEEP is aimed at promoting actions in advance to avoid potential short-term capacity emergencies and longer-term adequacy problems in the Northwest Power Pool area. Among other things, the NEEP provides criteria for communicating emergency warnings and energy adequacy problems to the utilities, state and federal agencies, public officials, and the public. Once a regional warning has been issued, load reduction measures include: halting discretionary exports of power; adjusting planned outages for the maintenance of generation or transmission facilities; operating generating resources to full operational capabilities; exploring options to increase transmission capability; and curtailing supplies to customers via existing contract provisions or purchasing load reductions from customers.
THE CURTAILMENT PLAN
A. Three Stages
Idaho Power’s Rule J Curtailment Plan contemplates three stages consistent with NERC’s definition or criteria, that escalate in relationship to the severity of the emergency. The applicability of Stage 1 and Stage 2 alerts will depend upon the circumstance(s) which are causing or contributing to the power emergency. For example, situations which require immediate attention, may necessitate moving immediately to a Stage 3 power emergency.
Without getting too technical, Idaho Power’s system is required to operate in a “balanced” condition. In other words, at any given time, the generating resources of the Company must be sufficient to meet the demand or load caused by customer usage. The WSCC requires that Idaho Power maintain a 5% reserve capacity for its hydroelectric generating resources and a 7% reserve for its thermal (coal and gas-fired) generating resources. Under its Rule J, the Company will declare a Stage 1 power alert when it foresees or is experiencing conditions where it cannot sustain spinning and non-spinning reserves of at least 5% hydro and 7% thermal. Before declaring a Stage 1 alert, the Company will: 1) bring on all additional generation; 2) purchase necessary additional generation from sellers or the Northwest Power Pool; 3) exercise its right to curtail power delivery to customers or non-firm wholesale energy transactions; and 4) seek voluntary curtailments.
When declaring a Stage 1 alert, the Company will issue public warnings requesting that all customers reduce energy usage on a voluntary basis. Idaho Power will also notify the WSCC regional coordinator and the State Communications Center.
In the event that Idaho Power cannot maintain its 5% and 7% reserves, then the Company will declare a Stage 2 alert. Additional actions for Stage 2 alert include seeking emergency assistance from neighboring utilities and increase efforts to conserve or reduce load.
At such time as the Company’s reserves fall below 2.5% for hydro and 3.5% for thermal, then the Stage 3 power emergency will be declared. Stage 3 emergencies require the Company to curtail load. As previously mentioned, Stage 3 power emergency may also occur if there is a disturbance or event which requires immediate action to maintain system reliability. In such extreme emergencies, the Company will take automatic action to balance load in order to avert a system blackout. If the three automated load shedding mechanisms are not sufficient to maintain system reliability, then the Company will initiate load shedding in the form of rotational outages.
B. Rotational Outages
Idaho Power’s service areas are divided into five regions. The regions are: Payette (Payette, Eastern Oregon, McCall areas); Canyon (Canyon County area); Capital (the Boise area); Southern (the Twin Falls area); and Eastern (the Pocatello area). If rotational outages are required, the Company’s control center will determine the amount of load to be curtailed in each region. The necessary curtailments will be allocated on a pro-rata basis according to load in each of the five regions. Idaho Power’s Control Center will inform each Regional Dispatch Center of its curtailment obligation. In the event that the problem is confined to a local area within a region, the regional team will decide how much load to curtail.
It is the Company’s intent to implement rotational outages in a fair and equitable manner, while maintaining system reliability. Each regional team will use its best judgment based upon their knowledge of the system and customers to make decisions regarding which distribution circuits to curtail and the curtailment sequence. When implementing rotational outages, distribution circuits in each of the 5 regions will be curtailed. Outages are expected to last one to two hours. The outage duration will be determined by customer requirements, cold load pick-up, crew availability, etc. When possible, large customers will be provided advance notification to minimize the effect on customers. When rotational outages become necessary, information will be disseminated through voice mail messages, e-mail, the Company Internet site, and public announcements.
Depending on the events which precipitate the various stages, the Idaho Bureau of Disaster Services, County/City 911 Centers, Fire Departments, Sheriffs Departments, Police Departments, and public officials (PUC, Disaster Services, Cities, Counties, Dept. of Admin.’s IT, Red Cross) will be notified.
COMMISSION REVIEW
Idaho Code § 61-531 requires all electric corporations to maintain a Plan for the curtailment of electric or gas consumption during an emergency. Idaho Code § 61-532 requires that these Plans be submitted and reviewed by the Commission. In reviewing the Plans, the Commission is to consider: consistency of the Plan with the public health, safety and welfare, the technical feasibility of implementing the Plan; and the effectiveness with which the Plan minimizes the impact of any curtailment. Id.
As envisioned in the Plan, Idaho Power does not anticipate that specific customers or customer class will be exempt from the impacts of curtailment. More specifically, the Company plans that rotational outage curtailment will occur by circuit based upon the regional team’s goal of minimizing impacts on communities. In other words, the Company does not exempt certain customers like hospitals, 911 dispatch centers, police and fire stations from curtailment. The adverse effect of curtailing service to these types of entities is mitigated by the notification procedures and by the fact that many, if not most, of these facilities already maintain emergency back-up systems. In addition, the Company’s automated curtailment schemes do not lend themselves to selective curtailment because time is of the essence and they have limited control.
Staff believes that it is appropriate to issue a Notice of Application and to seek public comment on the Company’s Curtailment Plan. Staff recommends that the Commission request comment within 28 days of the date the Notice is issued.
COMMISSION DECISION
Does the Commission desire to issue a Notice of Application and a Notice of Modified Procedure concerning the Company Curtailment Plan?
Does the Commission wish to establish a 28-day comment period?
Does the Commission wish to implement any other procedures or processes?

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DECISION MEMORANDUM 3